Obama, Congress Must Heed Starbucks CEO’s Challenge

On Sept. 6, Starbucks CEO Howard Schultz published a letter to “Fellow Citizens” in The New York Times challenging the leadership of both parties in Washington, the president and the Congress, to “put an end to partisan gridlock and, in its place, to set in motion an upward spiral of confidence.”

Schultz and more than 100 other business leaders — including Walter Robb, co-CEO of Whole Foods Market; Tim Armstrong, chairman and CEO of AOL; Barry Sternlicht, chairman and CEO of Starwood Capital Group; Ted Leonsis, owner of the Washington Capitals; and the CEOs of both the New York and the NASDAQ stock exchanges — have signed a two-part pledge.

Part one of the pledge is “to withhold political campaign contributions until a transparent, comprehensive, bipartisan debt-and-deficit package is reached that honestly, and fairly, sets America on a path to long-term financial health and security.”

Part two is “to do all we can to break the cycle of economic uncertainty that grips our country by committing to accelerate investment in jobs and hiring.”

President Barack Obama’s speech last week was a good one, and well-delivered. While he focused on job creation, not debt reduction, 60 percent of the cost of his $447 billion jobs bills came from tax cuts and credits, programs Republicans should support. But he promised to pay for the entire new package through a combination of spending cuts and new revenues through closing tax loopholes.

The Republicans must do more about the public’s demand for jobs creation than sit, Herbert Hoover-like, and insist the answer to high unemployment is simply fewer regulations and lower taxes (which increases the deficit). They know that their job performance is rated far worse than President Obama’s declining numbers.

If they fail to follow Schultz’s plea — “to put citizenship ahead of partisanship now” — there could be an incumbent bloodbath even worse than the Democrats suffered in 2010.

Schultz’s eloquent public letter is important because he and the company he leads, Starbucks, represent a type of business that too many Republican conservatives and Democratic liberals ignore.

Starbucks started providing health insurance for all its employees (called “partners”) even in the early days when it was losing money. Now all workers, including 65 percent who are part-timers, receive basic healthcare coverage for only a modest contribution per month, as well as pension and profit-sharing stock option plans.

Schultz explained to Business Week recently: “Early on we wanted to build a different kind of company. A company that made a profit, built shareholder value, but had a social conscience, integrated back into the company. The challenge was, could you do that and still make a profit?”

In other words, Starbucks and many other companies today prove that it is possible for business to do good and do well.

They also serve as a reminder that the “third way” created by Bill Clinton, especially in his second term as president, can still win a majority of Americans who reflect their ideological mix: fiscal responsibility, progressive social policy, and cultural moderation and tolerance.

President Obama’s speech last week shows he is willing to embrace this centrist blend, including taking the heat challenging the left base of his own party. But he may not have the time unless the economic facts on the ground actually change, and soon.

As nonpartisan political analyst Charlie Cook wrote last week, “The president is within shouting distance of the tipping point when [most voters of all parties] don’t care about words anymore . . . they believe in an economic turnaround only if they see it, feel it, and experience it. They will believe that the system works, that Washington matters, [only] if they see results, and not until then.”

Whatever else he does, President Obama cannot afford one example of a federal regulation that unnecessarily hurts the private sector and kills jobs. That “shouting distance” to which Cook refers is too narrow. He might not be able to reduce unemployment dramatically in the next 14 months. But one thing is clear — Obama has zero tolerance if his policies or his regulators make matters worse.

Lanny Davis is the principal in the Washington, D.C., law firm of Lanny J. Davis & Associates. He served as President Clinton’s Special Counsel in 1996-98 and as a member of President Bush’s Privacy and Civil Liberties Oversight Board in 2006-07. He is the author of “Scandal: How ‘Gotcha’ Politics Is Destroying America” (Palgrave Macmillan, 2006). He can be found on Facebook and Twitter (@LannyDavis).